Show Me the Money

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.

May 17, 2013 - 14:13 — CAGW Staff

The Washington Post had an interesting column a few days ago. It seems Health and Human Services (HHS) Secretary Kathleen Sebelius is asking for more money from health industry officials to help implement Obamacare since Congress is refusing to provide more funds. While the effort is caged as asking for “donations” it does not take someone from Mensa International to know this is very questionable behavior. When a government official from an agency that regulates a business asks for donations from that business to support a government initiative, is it not really a shakedown? What's more, why is this even occurring? Were not the American people promised that Obamacare would make for “more affordable coverage?”

The Congressional Budget Office is now scoring Obamacare at a cost of $1.8 trillion over ten years. But let's go back to yesteryear when Americans were promised by the president and Congress that Obamacare would cost less than $1 trillion over ten years. President Obama said in a joint session before Congress in 2009 that his health plan “will cost around $900 billion over 10 years.”

Furthermore, to bend down the healthcare cost curve, officials in the White House and members of Congress met and negotiated with the healthcare industry several times and extracted billions of dollars to pay for Obamacare. And how much is the industry already paying?

At minimum, the pharmaceutical industry will pay $26 billion and hospitals will pay $58.8 billion in just new fees over ten years. The medical device industry will pay a 2.3% excise tax on total sales each year, which is estimated to cost the industry $30 billion over ten years. Of course, the industry will pay much more due to a variety of other provisions in the healthcare law, in lost R&D opportunities, and jobs.

In February, the Obama Administration announced it was closing down to new applicants the high-risk pool that was created under the healthcare law because there was not enough funding. Started in 2010, the high-risk pool was suppose to last until 2014 when Obamacare was up and running. Many policy experts thought there was never enough money in the high-risk pool to start with but the salient point here is Congress is never good about predicting what a government-run program will cost and usually always underestimates its price tag. For example, Congress predicted in 1967 that Medicare would cost $12 billion in 1990. Its actual cost was $110 billion in that year.

Is this demand by a government official – oh sorry – this “request” by a government official for donations from industry even illegal? According to the Washington Post Federal regulations do not allow Department officials to fundraise in their professional capacity. They do allow Cabinet members to solicit donations as private citizens as long as they do not solicit funds from a subordinate or from someone who does business or seeks to do business with the Department they represent. HHS spokesman, Jason Young noted that there is a special provision in the Public Health Service Act that allows the secretary to encourage donations to nonprofit groups working to provide healthcare information. However, a health industry official said there was a “clear insinuation by the administration that the insurers should give financially to the nonprofits.”

Hmmmm….talk about threading the needle!

As predicted by many of us in the “smaller government is better crowd,” Obamacare is going to cost taxpayers much more than it was predicted to cost. It is also clear the roll-out of Obamacare is going to be a “train wreck” and there is panic in Washington as 2014 gets closer and closer.